Credit Score Tips: Not getting a loan, fix your credit score in just 12 months, this is the process..

A credit score is very important for borrowers as banks or financial institutions decide to approve a loan based on it. People who have a poor credit score can take some necessary steps to improve it and become eligible to get a loan on easy terms. Easy terms include lower interest rates and quick loan processing.

Since improving your credit score is a long process, the sooner you start it, the better it will be. So that good results can be seen by the end of the year.

What to do to improve credit score?

1. Correct the errors in the report

First of all, look at your credit report carefully and if there is any error in it, then get it corrected. For example, a payment is being shown as 'due' even though you have already paid it.

2. Use less credit

You should try not to use more than 30% of your credit limit. For example, if your total credit limit is Rs 20 lakh, then try not to use more than Rs 6 lakh. You can also have more than one credit card to maintain a better balance.

3. Have different types of loans

To improve your credit score, you should have different types of loans like credit cards, personal loans, and car loans. However, if you do not need a loan or card, do not take it just to increase your score. But you can get a credit card that does not have any direct expenditure until you use it.

4. Make timely payments

It is very important to pay all your bills and loan installments on time. If you miss a payment even once, your score can fall significantly.

5. Do not close old cards

If you have an old credit card, do not close it. Old cards show a longer credit history, which is beneficial for your credit score. If you want your loan to be approved easily and at a lower interest rate, then start working towards improving your credit score right now. Patience and regularity will bring improvement.

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